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The Far North District Council's economic development committee has been unable to make a decision on an issue Mayor John Carter describes as "difficult".

At its recent meeting, the committee referred to the full council whether to approve a $95,000 grant of ratepayer funds to the Warawara Forest Economic Development Project to build 2km of road access into the forest. Te Runanga o Te Rarawa, an administrator of Warawara Forest along with Northland Regional Council (NRC), Department of Conservation (DoC) and conservation group Reconnecting Northland, applied for the grant.

The 2km road upgrade, proposed for later this year, would improve pest control workers' access to DoC tracks and be infrastructure for future development, such as iwi-led tourism and educational programmes.

A report by Joanne Field, strategic planning and projects manager, said the council could not fund the upgrade out of the roading budget because it was not a public road. Instead, the money could be a "one-off grant" from the economic development budget.

But the recommendation ignored due process, economic development committee chairwoman Di Maxwell said.

She described the Warawara development as "tenuous" and said the roading project was on "private" land. Pest control was the responsibility of the Northland Regional Council, not the FNDC, she said. The committee referred the matter to the next full council meeting on July 28.

The issue was brought to the agenda by the Paihia and Districts Residents and Ratepayers Association which questioned granting public money to private landowners.

"We are concerned that what has happened here, or is proposed to happen, could be used as any sort of precedent in relation to future alleged urgent or ad hoc one-off ratepayer funds to fix up a private driveway that happened to connect to a DoC estate," a representative said.

"We note there is an understanding between DoC, NRC and Te Runanga o Te Rarawa, and wonder why this inter-agency forum wasn't able to fund itself if the business case doesn't meet their objectives, as we note they have committed $1 million to this project already."

The council's Far North Economic Action Plan states it should facilitate or support community and economic development services and initiatives to help build "stronger, active, resilient and cohesive communities that are better able to manage their own self-determined and sustainable development".